Another fuel price cut in the offing: Deora

The central government could possibly announce another round of cuts in the prices of petro fuels soon, whereby the price of LPG cylinders for domestic consumption may also be cut, petroleum minister Murli Deora has said.

Speaking to the media at the All India Congress Committee (AICC) headquarters, Deora said that the government would try and reduce the prices of petrol and diesel over the next two or three weeks, even though the quantum of the reduction still remains to be decided.

Reports, meanwhile quoted Deora as saying that price reduction on LPG or cooking gas cylinders would involve a loss to the government. He also hinted at a price cut of up to Rs25 per cylinder. LPG cylinders for domestic use are heavily subsidised.

The govern mt last cut fuel prices on 5 December 2008, on the back of falling crude oil prices in the global market. Petrol prices dropped Rs5 per litre, while diesel became cheaper by Rs2 following the reduction. The pricing of LPG cooking gas cylinders was untouched.

The international price of crude is currently hovering around $50 per barrel.

"The cut may be as much as last time, or may be even more," Deora said. The price reduction ahead of the general elections, which is due in May this year, would further reduce inflation. Inflation has come down to around a 10-month low of 6.6 per cent, and analysts expect the low inflation to fuel further cuts in interest rates.